So, you’ve taken the plunge and decided to enter the world of crypto-currency. But the question still remains, “What do I do with all of these bitcoins?” This post will cover the basics of setting yourself up for easy spending, keeping your bitcoins safe while doing so, and finally, some reasons why a consumer would want to use Bitcoin as opposed to regular currency.
Using Bitcoin Efficiently
If you’ve been following this blog, or are already familiar with bitcoin, then you know not to keep all of your Bitcoin funds in a place that can be easily hacked, such as a web or mobile-based wallet. But spending your bitcoins can be difficult if they’re locked up tight in a secure desktop wallet (such as Armory).
One best practice for this dilemma is to keep a web or mobile wallet handy, such as Blockchain.info’s mobile app, for easy spending, and only transfer small amounts from your desktop client for daily use. This way, even if your less secure wallet is hacked, you’re only out a small amount and the majority of your funds are kept safe.
This is much easier to do than it sounds. All you need to do to transfer funds to your hot (web-enabled) wallet is type in the public address of your hot wallet in your desktop account, sign it with your private desktop key, then go to your hot wallet and confirm the transfer with that account’s private key: simple, convenient, and secure.
But Why Spend Bitcoins in the First Place?
There are many reasons why a consumer would choose to use a digital currency like Bitcoin over traditional currency, not only for online purchases, but also for in person transactions.
First, it keeps your credit card information safe from prying eyes. As we have learned from the high profile credit card hacks at Target and Home Depot, among other, smaller hacks, it is relatively simple for someone to access your information if the store is not taking proper precautions.
This means that you always have to trust in third-parties (i.e. the store taking your info and the credit card company) to keep your information safe. This is not the case with digital currency. Since you are the only one who ever sees your private key information, you are always the one in control of your funds.
Merchants benefit from accepting digital currency, too. Credit card companies charge merchants transaction fees for every purchase, which are virtually non-existent with Bitcoin. There is also a high risk of fraud, such as when a consumer commits a charge-back scam. Credit card companies will often side with the customer making the dispute, with the merchant losing money for goods and services they thought were paid for.
We have seen that there are clear benefits to both the merchant and consumer who are using Bitcoin. So, why aren’t more people using it as currency?
Well, the answer is a sort of chicken-and-egg problem, as consumers don’t see the benefit because not many merchants are accepting Bitcoin and merchants don’t see the need to accept Bitcoin because not many of their customers are using it.
That being said, the number of people buying in to Bitcoin is growing, as is the number of merchants who accept it. It is only a matter of time until a critical mass is reached and this new technology becomes a mainstream form of payment. Until that time comes, here is a list of places you can already spend your Bitcoin so that you too can start enjoying the benefits.
Harborly is the simplest, quickest and safest way to buy and sell Bitcoin globally using your local currency. Sign up today to get started!